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  1. #1

    Starting a business from scratch

    Hi there. I've recently been trying to start up a small hosting company for my local city, and I'm running into plenty of hurdles to jump. I assume that this is to be expected however there's just one that I'm not sure I can jump, and I thought that most of you here have been successful so you'd be just the group to ask.

    As I'm looking to get a merchant account to accept credit cards online I'm finding that many companies such as psigate want details on the last year of how much businss you've done. The problem is, there was no "last year", I'm only a couple weeks into starting things and I consider a merchant account to be a critical phase in getting things ready to go live. Does anyone here know of merchant account providers who understand this circumstance? Or has anyone here had success starting out without a merchant account. Or am I just a dumb fool to be attempting this as a startup? I'm forunate in that I don't need a lot of startup capital for this type of business off the start, so that I can get past. However, I know I personally would never buy hosting from a company that couldn't even process my credit card, and I assume that others would feel the same. I don't want to start up only to fail because I couldn't get a merchant account.

    Thanks in advance for any helpful suggestions.

  2. #2
    Join Date
    Mar 2004
    Location
    Pennsylvania, U.S.A.
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    Did you try PayPal.com? Other then you can't you take phone and mail orders with credit cards, PayPal is for you. They don't charge a set-up fee, they don't charge a monthly fee either! They charge I think 2.2-2.9% and 45 cents for each sale you make, not bad! To sign up just go to www.paypal.com

    Hosting can be a very rewarding business to get into. Don't expect to make a huge profit as soon as you open.

  3. #3
    Join Date
    Jun 2003
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    You can also try Paysystems or 2checkout initially. There is a $49 setup fee for either one; can't recall off the top of my head what their per transaction costs are, but neither has a monthly fee.
    This could let you get your business going at least, and give you something to show when you apply for a standard merchant account.

    Paysystems: http://www.paysystems.com
    2checkout: http://www.2checkout.com
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  4. #4
    Join Date
    Feb 2004
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    Southern California
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    749

  5. #5
    www.paynetsystems.com is a pretty good company. 98% approval rate.
    Great Hosting Companies for Great Businesses

  6. #6
    Join Date
    Mar 2003
    Location
    Duluth MN
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    3,864
    E-OnlineData/Authorize.net is a good way to go as well for startups...

    www.e-onlinedata.com

  7. #7
    Join Date
    Nov 2002
    Location
    Canada
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    1,544
    just let them know you're a new business.

  8. #8
    Join Date
    May 2001
    Location
    Colorado, USA
    Posts
    812
    Talk to your local bank where you have your business account. They will check your personal credit history and if that looks Ok, you might get it from them. As mentioned before by other forum members - some companies also accept new businesses. You need to ask.
    Web Hosting Resource Kit - Web Hosting Reviews & Hosting Tutorials

  9. #9
    Greetings:

    You should check with your local chamber of commerce.

    They can help you by putting you in touch with the right people or pointing to other resources you might have missed.

    The local chamber of commerce might also be a good resource for getting the word out about your new business.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  10. #10
    Join Date
    Jan 2003
    Location
    Chicago, IL
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    6,889
    I agree with checking your local bank, where you have your business checking account. They'll see you're new to the business and likely be more than willing to help you out, as long as you have decent personal credit.
    Karl Zimmerman - Steadfast: Managed Dedicated Servers and Premium Colocation
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  11. #11
    Alright, all great responses. Thanks guys, I'll post back in a few weeks with an update on what worked best for me. Thanks

  12. #12
    Join Date
    Feb 2004
    Location
    Local area network
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    17
    Okay all the best with your new start up

    Regards
    www.Globalhostingservices.com
    Reliable Hosting at afforable prices.
    A good 24/7 support is the key to success.

  13. #13
    E-onlinedata/Authorize.net work great for me because they are so universally accepted. They integrate with many shopping carts and billing systems flawlessly. I have a rate of 2.15% +.30 per transaction. I have a legit merchant account and it gives you alot of control over the billing and credit cards with the gateway tools and virtual terminal. Modern Bill also adds to that, but there is a steep learning curve there, so don't expect to become an expert too soon. The advice I would give would be to go with whatever costs the least in setup, and upgrade when time suits you best. I know you (just as I did) had the idea that within that week I would have a thousand customers and be rolling in the bucks. That doesn't happen.

    I would suggest either Paypal or 2checkout.com. Just be sure to look around to see what the negatives are for each of these. www.paypalsucks.com is a anti-paypal site which points out some good truths, or you could search for 2co on WHT. A merchant account will be the end goal, but make sure you only upgrade when you are ready, because the fees associated are around 40-50/mo including the business bank account. Hope that helps...

  14. #14
    Join Date
    Jul 2001
    Location
    UK
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    2,567
    As stated throughout the whole of this post, it is very easy to get a 3rd Party merchant account when you're a complete newbie in the world of business.

    2CheckOut, PaySystems and PayPal always seem to be at the top of the list for 3rd Party Merchant accounts. They accept people from anywhere around the world, and allow you to accept various currencies. Another very good one is WorldPay - it's a more professional one and is backed by the Royal Bank of Scotland.

    However, as another said, go to your local bank and talk with them. If your credit rating is very good, then they should be willing to help you and guide you along the right directions.

    The most important thing to remember is that just because you are new to the world of business, doesn't mean you don't have a chance to start up. If that were the case, then there wouldn't be as many companies and shops as there are now... everyone started small and climbed up the ladder.

  15. #15
    Join Date
    Aug 2003
    Posts
    2,734
    PayPal is the easy way of accepting payments or 2checkout.com is quite good as a credit card proccessor

  16. #16
    wow, lots of good replys. Thanks again guys. I forgot to mention that I'm one of the dirty ice-skaters of the north so that's thrown me for a bit of a loop too. The way things look right now I'll probably go with 2checkout for now. I'm going to see if it plugs into modernbill at all, though it doesn't seem to. I just hope customers dont' react like I would and leave when the payment processing system seems unprofessional. Thanks again for all the help guys, I appreciate it. I'll post back once I get some more progress on this.

  17. #17
    Join Date
    May 2001
    Location
    Colorado, USA
    Posts
    812
    I think 2checkout or Paysystems do not look unprofessional. If you explain properly why you are using them (fraud protection, concentrating on core business, etc.). Sure, your own merchant account might look more professional but does not mean the other ones are bad either.
    Web Hosting Resource Kit - Web Hosting Reviews & Hosting Tutorials

  18. #18
    I have a basic question in regards to "starting from scratch":

    My ISP Comcast charges $15/month for each IP I buy. How could I make a profit as a webhoster if typical webhosting fees are around $10/month?

    Thanks.

  19. #19
    Join Date
    Mar 2004
    Location
    Minnesota
    Posts
    24
    Originally posted by cdillard
    I have a basic question in regards to "starting from scratch":

    My ISP Comcast charges $15/month for each IP I buy. How could I make a profit as a webhoster if typical webhosting fees are around $10/month?

    Thanks.
    Unless your doing SSL you should be able to host multiple sites on a single IP.

    Jon

  20. #20
    Originally posted by cdillard
    I have a basic question in regards to "starting from scratch":

    My ISP Comcast charges $15/month for each IP I buy. How could I make a profit as a webhoster if typical webhosting fees are around $10/month?

    Thanks.
    If you are talking about hosting from Comcast at home, please don't do it. If you have an account with Comcast hosting?, then $15 a month is way to high. Run away.
    "Beer is proof that God loves us and wants us to be happy" -- Ben Franklin
    Twice Tied Laces

  21. #21
    Join Date
    Aug 2000
    Location
    NYC
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    6,627
    Originally posted by theradus
    As I'm looking to get a merchant account to accept credit cards online I'm finding that many companies such as psigate want details on the last year of how much businss you've done. The problem is, there was no "last year", I'm only a couple weeks into starting things and I consider a merchant account to be a critical phase in getting things ready to go live. Does anyone here know of merchant account providers who understand this circumstance?
    I would think that any of them do. Just because they ask that question on their application, online app or otherwise, doesn't mean that they won't consider new businesses. They're simply using that as one measure both of your creditworthiness and of the type of volume to expect (one factor in determining rates).

    Just answer that question with a simple "N/A."
    Specializing in SEO and PPC management.

  22. #22
    once again i sugest to any one befor they do a start up is to contact SCORE "Counselors to America's Small Business" score.org and the Small Business Administration sba.gov they can get you on the right track for free

  23. #23
    Alrighty, so just to update. I did have trouble getting approval from some sites, however I think that psigate was going to approve me. Before I applied though I decided to go with 2checkout until I actually see a profit. It seems to work nicely with modernbill. I do believe a merchant account looks more professional, however I just don't want to deal with fraud, and I really do need to prove to myself that this can be profitable before I get a merchant account(and probably to them as well).
    My first customer, yeah, fraud...how much fun is that, the very first one. Now that things are ready and going I face another challenge, marketing. And I have to say, that one looks daunting, I'm not really sure what the best method is going to be on this, but I know that I have to generate more traffic. Any suggestions guys?

  24. #24
    Join Date
    Mar 2004
    Posts
    1,301
    Depends on what your budget is theradus, target your local market by making flyers, put your business card everywhere you go, learn how to do effective networking. try to sponsor web designer/developer sites. Before anyof this Identify your Target Market. Once you have that in mind then go ahead and market.
    PM for referral to some companies. thanks
    "Web Hosting is not just about selling space, it is about facilitating customers needs with your plans and supporting the customer for a long lasting mutually beneficial relationship."- Yaser

  25. #25
    Check out ProPay.com. They're easy to get approved for, they have a nice GUI for managing credit card transactions, and their rates are comparable to PayPal.

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